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Satchu's Rich Wrap-Up
Monday 19th of November 2018

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Macro Thoughts

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19-NOV-2018 :: The Blue Economy is a Blue Sky Opportunity

Kenya with its Co-Hosts Japan and Canada will be hosting ''The
Sustainable Blue Economy Conference'' [which]  is the first global
conference on the sustainable blue economy headlined The blue economy
and the 2030 Agenda for Sustainable Development. Coming from Mombasa,
the Ocean has always loomed large in my imagination. I would often
think about my Predeccessors sailing on the ''monsoon'' winds all the
way from India to East Africa a hundred and twenty years ago. Deep in
my memory's mausoleum, I can discern an image of dhows in the Tudor
creek. I have spent time in a Fishing Village near Maputo and I have
to admit it was in that village that I enjoyed the most flavoursome
Tiger Prawns ever. I recall my French Tutor who was Seychellois
describing the Seychelles to me. Of course, coming from Mombasa, one
of our evening Treats was to take an incredibly slow drive around the
Sea Front, the big Baobabs to your left, the Likoni Channel to your
right and looking forward to cassava [with lashings of chillies and
lemon] all washed down with the sweetest of coconuts. Sometimes, a big
ship would come by. My favourite beach of all is Diani and spending
time with the Fishermen, a different breed, typically slim always
cryptic but somehow ennobled because of their intuitive understanding
of the Ocean and how the Ocean is like the Lord "The Lord giveth, and
the Lord taketh away" To that Point, we took a Ferry in the Seychelles
and an apocalyptic storm descended on us and I remember thinking to
myself about all the brave Souls who ended up at the bottom of the
sea. I have wandered the streets in Zanzibar, Lamu and even Gedi and
thought of and even felt them vividly alive with the presence of
Peoples long past. These were sophisticated People, did you know they
had an air-conditioning system in Gedi. Later in life, I recall the
breathtaking drive on the Pacific 101 from San Francisco to Carmel
where you drive right on the Pacific Ocean.  Anyway, let me extract
myself from this wormhole because whilst the Sea and the Blue Economy
is the common narrative theme, I need to jump to the Future because as
M.G. Vassanji has written

 "The past is a dangerous business, warned Akilimali; it is best to
keep it buried.".

Firstly, we need to define ''The Blue Economy'' The blue economy has
''diverse components, including established traditional ocean
industries such as fisheries, tourism, and maritime transport, but
also new and emerging activities, such as offshore renewable energy,
aquaculture, seabed extractive activities, and marine biotechnology
and bioprospecting''

“When we say ‘blue economy,’ says Keith Lawrence, lead economist of
Conservation International’s Center for Oceans, “we’re talking about
managing the ocean in a way that it’s healthy and continues to benefit
people. We used to think of the ocean as this expansive, unknowable,
infinite resource that we could never fully exploit, and that we
didn’t really need to manage because it’s so massive and it’s out
there on its own.”

Its always difficult to put a Dollar value on the environment but two
years ago, economists put a dollar value on what our oceans are worth
and came up with $24 trillion. If it were a country, the sea would be
the seventh-largest economy on the planet.

"When you look at the blue economy, it has an asset value of $24
trillion and that's delivering something between $4-500bn each year in
terms of the dividend to humanity," says Professor Ove Hoegh-Guldberg,
director of the Global Change Institute.

More than half of the countries in the African continent are coastal
and island states. Africa has a coastline of over 47,000 km and 13
million km2 of collective exclusive economic zones (EEZs). Yet, very
little of the potential of the blue economy is actually exploited. It
is estimated that Africa’s coastline currently hosts a maritime
industry worth $1 trillion per year, but could potentially be worth
almost three times that in just two years’ time. It is estimated that
Africa is losing US 1.3 billion dollars every year. For the more than
one-quarter of Africa’s population that lives within 100 km of the
coast and derive their livelihoods there, climate change, rising sea
temperatures, ocean acidification and rising sea levels, all present
further challenges. Fast-growing African cities are at 'extreme risk'
from climate change said Verisk Maplecroft last week.

This conference is a real opportunity to get all Stakeholders onto the
same Page. We need to first assert sovereignty over our Blue Economy.
Next we need look at the ''low-hanging'' fruit. Maritime based
transport looks like a ''No-Brainer'' The Capital Markets also have a
big role to play. The Seychelles recently issued the  World’s First
Blue Bond to Fund Fisheries Projects. The Republic of Seychelles
announced that it has issued a 10-year blue bond to finance fisheries
projects, making it the world’s first country to utilise capital
markets for funding the sustainable use of marine resources.

Its a Carpe Diem moment and the Blue Economy is a Blue  Sky Opportunity.

Home Thoughts

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Sossusvlei in the Namib Desert is usually just a dry, white clay pan surrounded by mighty dunes via @africageo Claudia and Wynand du Plessis

Sossusvlei in the Namib Desert is usually just a dry, white clay pan
surrounded by mighty dunes. Every five to eight years, however, the
pan is flooded by the Tsauchab River during times of exceptional
rainfall along the escarpment a hundred kilometres further east. This
photo was taken just a few minutes before sunset after having waited
two hours for the sun to reappear from behind the clouds in the west.

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A dramatic sunset at the Fairy Tale Forest in the Etosha National Park after a heavy rainstorm has just passed @africageo
Law & Politics

A dramatic sunset at the Fairy Tale Forest in the Etosha National Park
after a heavy rainstorm has just passed. When the sunlight finally
breaks through in the western sky it pours a symphony of colours onto
the flooded savanna that just an hour earlier resembled a barren

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Deadvlei with its bizarre dead Acacia trees offers countless photographic possibilities @africageo Claudia and Wynand du Plessis

Deadvlei with its bizarre dead Acacia trees offers countless
photographic possibilities. However, this image can only be taken in a
short time window at sunset, when the pan floor is already in shade
and the dune behind is still illuminated by the setting sun.

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.@CIA concludes Saudi crown prince ordered Jamal Khashoggi's assassination @washingtonpost
Law & Politics

The CIA has concluded that Saudi Crown Prince Mohammed bin Salman
ordered the assassination of journalist Jamal Khashoggi in Istanbul
last month, contradicting the Saudi government’s claims that he was
not involved in the killing, according to people familiar with the

The CIA’s assessment, in which officials have said they have high
confidence, is the most definitive to date linking Mohammed to the
operation and complicates the Trump administration’s efforts to
preserve its relationship with a close ally. A team of 15 Saudi agents
flew to Istanbul on government aircraft in October and killed
Khashoggi inside the Saudi consulate, where he had come to pick up
documents that he needed for his planned marriage to a Turkish woman.

In reaching its conclusions, the CIA examined multiple sources of
intelligence, including a phone call that the prince’s brother Khalid
bin Salman, the Saudi ambassador to the United States, had with
Khashoggi, according to the people familiar with the matter who spoke
on the condition of anonymity to discuss the intelligence. Khalid told
Khashoggi, a contributing columnist to The Washington Post, that he
should go to the Saudi consulate in Istanbul to retrieve the documents
and gave him assurances that it would be safe to do so.

It is not clear if Khalid knew that Khashoggi would be killed, but he
made the call at his brother’s direction, according to the people
familiar with the call, which was intercepted by U.S. intelligence.

Fatimah Baeshen, a spokeswoman for the Saudi Embassy in Washington,
said the ambassador and Khashoggi never discussed “anything related to
going to Turkey.” She added that the claims in the CIA’s “purported
assessment are false. We have and continue to hear various theories
without seeing the primary basis for these speculations.”

The CIA’s conclusion about Mohammed’s role was also based on the
agency’s assessment of the prince as the country’s de facto ruler who
oversees even minor affairs in the kingdom. “The accepted position is
that there is no way this happened without him being aware or
involved,” said a U.S. official familiar with the CIA’s conclusions.

The CIA sees Mohammed as a “good technocrat,” the U.S. official said,
but also as volatile and arrogant, someone who “goes from zero to 60,
doesn’t seem to understand that there are some things you can’t do.”

CIA analysts believe he has a firm grip on power and is not in danger
of losing his status as heir to the throne despite the Khashoggi
scandal. “The general agreement is that he is likely to survive,” the
official said, adding that Mohammed’s role as the future Saudi king is
“taken for granted.”

The assassination of Khashoggi, a prominent critic of Mohammed’s
policies, has sparked a foreign policy crisis for the White House and
raised questions about the administration’s reliance on Saudi Arabia
as a key ally in the Middle East and bulwark against Iran.

President Trump has resisted pinning the blame for the killing on
Mohammed, who enjoys a close relationship with Jared Kushner, the
president’s son-in-law and senior adviser. Privately, aides said,
Trump has been shown evidence of the prince’s involvement but remains
skeptical that Mohammed ordered the killing.

The president has also asked CIA and State Department officials where
Khashoggi’s body is and has grown frustrated that they have not been
able to provide an answer. The CIA does not know the location of
Khashoggi’s remains, according to the people familiar with the
agency’s assessment.

Among the intelligence assembled by the CIA is an audio recording from
a listening device that the Turks placed inside the Saudi consulate,
according to the people familiar with the matter. The Turks gave the
CIA a copy of that audio, and the agency’s director, Gina Haspel, has
listened to it.

The audio shows that Khashoggi was killed within moments of entering
the consulate, according to officials in multiple countries who have
listened to it or been briefed on its contents. Khashoggi died in the
office of the Saudi consul general, who can be heard expressing his
displeasure that Khashoggi’s body now needed to be disposed of and the
facility cleaned of any evidence, according to people familiar with
the audio recording.

The CIA also examined a call placed from inside the consulate after
the killing by an alleged member of the Saudi hit team, Maher Mutreb,
a security official who has often been seen at the crown prince’s side
and who was photographed entering and leaving the consulate on the day
of the killing.

Mutreb called Saud al-Qahtani, then one of the top aides to Mohammed,
and informed him that the operation had been completed, according to
people familiar with the call.

This week, the Treasury Department sanctioned 17 individuals it said
were involved in Khashoggi’s death, including Qahtani, Mutreb and the
Saudi consul general in Turkey, Mohammad al-Otaibi.

The CIA’s assessment of Mohammed’s role in the assassination also
tracks with information developed by foreign governments, according to
officials in several European capitals who have concluded that the
operation was too brazen to have taken place without Mohammed’s

Turkish President Recep Tayyip Erdogan has said his government has
shared the audio with Germany, France, the United Kingdom and Saudi

In addition to calls and audio recordings, CIA analysts also linked
some members of the Saudi hit team directly to Mohammed himself. Some
of the 15 members have served on his security team and traveled in the
United States during visits by senior Saudi officials, including the
crown prince, according to passport records reviewed by The Washington

The U.S. had also obtained intelligence before Khashoggi’s death that
indicated he might be in danger. But it wasn’t until after he
disappeared, on Oct. 2, that U.S. intelligence agencies began
searching archives of intercepted communications and discovered
material indicating that the Saudi royal family had been seeking to
lure Khashoggi back to Riyadh.

Two U.S. officials said there has been no indication that officials
were aware of this intelligence in advance of Khashoggi’s
disappearance or had missed any chance to warn him.

Khashoggi “was not a person of interest,” before his disappearance,
and the fact that he was residing in Virginia meant that he was
regarded as a U.S. person and therefore shielded from U.S.
intelligence gathering, one of the officials said.

Trump has told senior White House officials that he wants Mohammed to
remain in power because Saudi Arabia helps to check Iran, which the
administration considers its top security challenge in the Middle
East. He has said that he does not want the controversy over
Khashoggi’s death to impede oil production by the kingdom.

One lingering question is why Mohammed might have decided to kill
Khashoggi, who was not agitating for the crown prince’s removal.

A theory the CIA has developed is that Mohammed believed Khashoggi was
a dangerous Islamist who was too sympathetic to the Muslim
Brotherhood, according to people familiar with the assessment. Days
after Khashoggi disappeared, Mohammed relayed that view in a phone
call with Kushner and John Bolton, the national security adviser, who
has long opposed the Brotherhood and seen it as a regional security

Mohammed’s private condemnation of the slain journalist stood in
contrast to his government’s public comments, which mourned
Khashoggi’s killing as a “terrible mistake” and a “tragedy.”

U.S. officials are unclear on when or whether the Saudi government
will follow through with its threatened executions of the individuals
blamed for Khashoggi’s killing. “It could happen overnight or take 20
years,” the U.S. official said, adding that the treatment of
subordinates could erode Mohammed’s standing going forward.

In killing those who followed his orders, “it’s hard to get the next
set [of subordinates] to help,” the official said.

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A 32-year-old wannabe king
Law & Politics

The then 30-year-old crown prince of Saudi Arabia Mohamed bin Salman
MBS, arrived on the scene and immediately launched an unwinnable war
in Yemen. President Assad, with his Russian, Iranian and Lebanese
allies, resisted the regime changers in Syria. IS, which was a Sunni
and Saudi blade, has been eviscerated. Iraq, which was once firmly in
the Saudi camp, is now aligned with Iran completely. Qatar is lost
(see the intercept article which refers to a plan headlined “Control
the yield curve, decide the future” a plan to construct the ‘’Big
Short’’ on Qatar - The crown prince of Abu Dhabi should have spoken to
me because I could have told them how to do it).

Saudi Arabia and its allies UAE, Bahrain, Kuwait are caught in an ever
tightening Shia pincer. The paranoia in the palaces in Saudi Arabia is
real and existential. And what is also clear is that Bibi Netanyahu,
MBS [the crown prince of Abu Dhabi], Jared Kushner and a Trump carte
blanche have all leveraged this existential paranoia to effect not a
state capture but a kingdom capture.

The existential paranoia in the head of 32-year-old wannabe King is
evidenced in this comment about Iran in May this year, “How can I
communicate with them while they prepare for the arrival of al-Mahdi

Last week after being coached into the early hours by Ivanka Trump’s
husband, Jared Kushner, MBS launched his night of the long knives,
which, according to the veteran Journalist Robert Fisk, and I quote:

‘’When Saad Hariri’s jet touched down at Riyadh on the evening of 3
November, the first thing he saw was a group of Saudi policemen
surrounding the plane. When they came aboard, they confiscated his
mobile phone and those of his bodyguards. Thus was Lebanon’s prime
minister silenced’’ Hours later, MBS’s newly minted Anti-Corruption
commission detained 11 House of Saud princes, four current ministers
and dozens of former princes/cabinet secretaries – all charged with
corruption. Bank accounts were frozen [We could witness a massive $1
trillion dollar disgorge right here], private jets grounded. The
high-profile Princely crew is jailed at the Riyadh Ritz-Carlton and
the gates are now shut, the phone line is perpetually busy and you
can’t book a room until Feb. 1. Fisk concludes ‘’Put bluntly, he is
clawing down all his rivals.’’

In all the history books I have read, its probably wisest to operate
on one front not two and certainly not three.

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12-NOV-2018 :: Mr. Khashoggi was murdered in cold blood in an obviously ''Quentin Tarantino'' style operation
Law & Politics

On the 2nd of  October, Jamal Khashoggi, a well-known journalist and
critic of the Saudi government, walked into the country's consulate in
Istanbul. He has not been seen since. In fact, President Erdogan whose
normal modus operandi is one of bluster and braggadaccio has played
this macabre murder on Turkish soil with finesse and a little like
Yehudi Menuhin played the Violin. Its been a virtuoso performance from
a Geopolitical perspective. The drip-drip Feed has meant closure has
been all but impossible for the House of Saud or is it the House of
Salman? Erdogan's rebound from Zero [You will recall the currency was
crashing around his ears not too long ago and he was in serious ''cold
Turkey''] to Hero has been spectacular.

The Target has always been MBS, alleged owner of Leonardo Da Vinci's
Salvator Mundi which is a painting of Christ as Salvator Mundi (Latin
for "Savior of the World")  dated to c. 1500. The painting shows
Jesus, in Renaissance dress, giving a benediction with his right hand
raised and two fingers extended, while holding a transparent rock
crystal orb in his left hand. The rock crystal orb of course
reappeared during Trump's visit to the Desert Kingdom. The Painting is
currently in the Louvre in Abu Dhabi because the ''optics'' of this
$450m purchase did not sit well with being the son and heir to the
Kingdom.  The King is called the Custodian of the Two Holy Mosques
(خادم الحرمين الشريفين) after all. MBS is also the Proud Owner of the
Serene [yacht] which he bought for 500m Euros in 2015, while
vacationing in the south of France. Bruce Reidel alleges MBS sleeps on
the Serene off Jeddah because he too lives in fear of his life.

Mr. Khashoggi was murdered in cold blood in an obviously ''Quentin
Tarantino'' style operation. The facts as have been presented are
stranger than fiction and my question is if this is how they conduct
themselves on foreign soil, just imagine what must be going on at
home. The Image of Khashoggi's son being compelled to shake MBS's hand
is surely the most apposite metaphor for the House of Saud.

The proximity of the beginning of the bear market in Crude Oil and the
disappearance of Khashoggi is no coincidence. The Sell-Off was
''manufactured'' by the Crown Prince and was his response and an
attempt to release some of the Pressure from the [geopolitical]
Pressure Cooker. It produced a Tail-Wind [or did not allow the Price
of Gas to become a Head-Wind] for President Trump as he entered the
Mid-Terms, now behind us of course. It was actually a ''Set-Up''
Trade. It was the only Get Out of Jail Card that the Crown Prince
could play. The Question is does this keep on spinning lower under its
own momentum?

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Washington's diplomacy wouldn't involve a "constricting belt or a one-way road", @VP pointedly told CEOs @TimesofIsrael
Law & Politics

“We’ve put tariffs on $250 billion in Chinese goods and that number
could more than double,” he said.

“We hope for better, but the United States will not change course
until China changes its ways”.

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Xi Jinping: US-China trade war will produce no winners
Law & Politics

Countries which embrace protectionism are "doomed to failure", China's
Xi Jinping has warned in a veiled swipe at the US's America First
Mr Xi was speaking at the Asia-Pacific Economic Cooperation (Apec)
summit, where US-Chinese tensions are likely to be centre stage.
US Vice-President Mike Pence later said he was prepared to "more than
double" the tariffs imposed on Chinese goods.
The two countries have been engaged in a tit-for-tat trade war this year.
The White House says its tariffs are a response to China's "unfair"
trade policies.
"Attempts to erect barriers and cut close economic ties work against
the laws of economics and the trends of history.
"This is a short-sighted approach and it is doomed to failure," he
added, warning those who close their doors "will only cut himself off
from the rest of the world and lose his direction".
But Mr Pence - who spoke at the forum directly after Mr Xi - said the
tariffs were a response to the "imbalance" with China.
"The United States, though, will not change course until China changes
its ways," he said.
His comments come a day after President Donald Trump told reporters he
was confident a deal between China and the US "will be made".
However, he said a number of key issues had not been included on a
list for negotiation ahead of the G20 summit, meaning it was "not
acceptable" yet to the president.
The president has made similar comments previously.

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Will history remember the coming Trump-Xi dinner party? @asiatimesonline
Law & Politics

President Trump has invited China’s President Xi to stick around after
the G20 Summit in Buenos Aires so that Trump can host a dinner party –
“maybe hamburgers, maybe more; it’ll be just great, great,” he might
have said.
Xi has tentatively accepted and the world can assume that the two
leaders will engage in substantial conversation about the trade war,
tension in the South China Seas and other subjects of deep concern to
both countries.
A major reason for low expectation is Trump’s notorious negotiating
style. He says one thing and means another. He always reserves the
right to abruptly change his position at any time.
This approach might have proven effective in his real estate dealings,
keeping his competitor off balance, but is not any good for building
trust and confidence with foreign countries.
He has also made a list of harsh demands and expects China to come to
Washington, hat in hand, with a list of concessions in exchange for
the privilege to sit down and negotiate. Trump seems to think the
Chinese would accept his upside down process, namely for China to
concede first, and then negotiate.
Thus we are left to speculate as to the possible outcome of the dinner
discussion in Argentina. Will it presage the beginning of a cold war
between China and the US? Or will it make some advances in the trade
war negotiation?

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09-JUL-2018 :: Tariff wars, who blinks first?
Law & Politics

President Trump after bashing on Justin Trudeau of Canada and Mexico’s
Enrique Peña Nieto [now upended, of course] and then firing a few
broadsides at Europe, has now turned his attention to Xi Jinping and
thrown him the Keys challenging him to a “Chickie Run.”

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Putin's Interests in Syria and Lebanon Are Limiting Israel's Military Options @haaretzcom
Law & Politics

Playing chess with Hezbollah is one thing. Trying to figure out what
Putin wants, in Syria and perhaps also in Lebanon, even as Hezbollah
is trying to manufacture weapons there, is a completely different
Russia has made it clear to Israel in many ways that the status quo
ante is gone. The air force’s energetic activity was disrupting their
main project — restoring the Assad regime’s control over most of Syria
and signing long-term contracts with Syrian President Bashar Assad
that will protect Moscow’s security and economic interests in the

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OCT 15 :: Let us return to UNGA, where Putin set out his stall and I quote: "I cannot help asking those who have caused the situation, do you realise now what you've done?"
Law & Politics

Within 24 hours of delivering that speech, Russia instructed that the
US should vacate Syrian Air Space. This message was not delivered to
Ashton Carter by his Russian counterpart Shoigu.

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Currency Markets at a Glance WSJ
Law & Politics

Euro 1.1396
Dollar Index 96.43
Japan Yen 112.75
Swiss Franc 1.001
Pound 1.2827
Aussie 0.7306
India Rupee 72.015
South Korea Won 1128.73
Brazil Real 3.7401
Egypt Pound 17.9370
South Africa Rand 14.0381

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Crude Oil Chart INO 57.37

Emerging Markets

Frontier Markets

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For its part, Russia not only has an interest in replacing the US in Africa and exporting its Syrian-tested stabilization and "balancing" models there @GRTVnews's @AKorybko

For its part, Russia not only has an interest in replacing the US in
Africa and exporting its Syrian-tested stabilization and “balancing”
models there (though in this case through much more indirect and
low-scale commitments), but it might also have more ambitious plans of
partnering with China’s Silk Road all throughout the “Global South”
via the security-related services that it could possibly provide to
Beijing in exchange for obtaining a share  of its host countries’
markets in the spheres that Chinese companies already dominate. Should
that be the strategy at play and it actually turns out to be
successful, then Russia would be masterfully exploiting the US’ “Lead
From Behind”strategy in Africa to pragmatically “Lead From the Front”
in support of China there, which could potentially represent a
game-changing twist in the way that the New Cold War unfolds in the
“Global South”.

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DRC elections: Kabila's perfectly imperfect choice of successor

On 27 October, presidential candidate Emmanuel Ramazani Shadary was
officially presented to thousands of voters at the Kinshasa Stadium
Tata Raphaël. In attendance to see him was a disparate crew of
heavyweights from politics and business, all claiming to be members of
the newly-minted Front Commun pour le Congo (FCC). Most were
chauffeured there in government-issued vehicles and were under heavy
police protection, adding to allegations the event benefited from
state machinery.

At one point, the top brass of the FCC took turns to thank the
outgoing President Joseph Kabila and praise his handpicked successor.
Their speeches were accompanied by cheers from supporters who wore
clothes featuring pictures of Kabila and Shadary and waved party
banners. According to allegations, most were paid to be there.

The event looked good for Shadary. But despite the rosy image
conveyed, most analysts agree that the former interior minister’s
chances in the upcoming 23 December election should be slim. He has a
very limited independent power base and is not widely known. He is
under international sanctions for his alleged role in the repression
of anti-Kabila demonstrations in 2016. In a recent opinion poll, just
16% of voters said they planned to vote for him.

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Trouble in the Congo: The Misadventures of @Glencore @business

A dozen years ago the future of technology bounced out of a remote
corner of Africa on the back of a truck, along with a world of
potential trouble. Both, embodied in the same load of rock, landed in
the hands of Ivan Glasenberg, chief executive officer of Glencore Plc,
the world’s largest middleman for the raw materials that fuel, feed,
and underpin civilization. Glasenberg’s obsession was copper, because
China’s appetite for it was insatiable, with copper wire electrifying
the nation’s rising cities and running through the appliances its
factories sold to the West. The metal’s price had quadrupled in less
than three years, triggering a global frenzy. Miners blasted it from
Chilean mountaintops and dug it from the African earth as fast as they

At a processing plant in Zambia, Glencore was buying up all the ore
containing copper it could get its hands on when technicians noticed
something extraordinary. One trader consistently rolled in with rocks
showing levels of purity that were off the charts—not just for copper,
but also for the blue metal cobalt. Glencore’s men asked the trader to
take them to the source, and Glasenberg joined the contingent that
trekked to the site some weeks later. The trader led them up a bumpy
track of red earth that crossed into the Democratic Republic of Congo
and led to a meadow covered with bluish-purple flowers. Locals dug up
rocks by hand and shoveled them into threadbare sacks. The place was
called Mutanda.

In 2007, Glencore bought a large stake in Mutanda, assumed operational
control, and fenced off the property. The subsistence miners who were
locked out had unwittingly discovered the richest vein of cobalt on
earth. Cobalt is essential for the batteries that power electric
vehicles and our ubiquitous mobile devices, and Congo produces
two-thirds of the world’s supply—it’s the Saudi Arabia of the electric
vehicle age, in the words of one analyst. With demand skyrocketing,
the price of the metal has tripled since mid-2016, and at one point
had quadrupled. Mutanda produces more cobalt than any other mine, and
the only one likely to overtake it anytime soon is nearby and also
owned by Glencore.

Glasenberg couldn’t have known just how important cobalt would become
when he invested in Mutanda, but he did know Congo would yield
something special. And he understood that in a country as physically
and politically unnavigable as Congo, Glencore would need good
relations with its temperamental government. The solution he struck
upon served the company well for many years: He teamed up with a brash
Israeli diamond trader named Dan Gertler, who’d been forging bonds
with Congolese elites for a decade.

Just six months ago, Glasenberg sounded confident that the crowning
moment of his journey remained ahead, reminding shareholders of
predictions that the world would need to triple cobalt production by
2030 to meet demand. “We’re the best placed of all the large-cap
companies to take advantage of this electric vehicle phenomenon,” he
said at Glencore’s annual meeting in May. But in July that promise
clouded. Glencore announced that the U.S. Department of Justice had
subpoenaed documents and other records related to its Congolese
investments and other deals, and was examining its compliance with
U.S. laws on foreign corruption and money laundering. The U.K.’s
Serious Fraud Office is also considering whether to open an
investigation, people familiar with the agency’s thinking told
Bloomberg Businessweek. These actions do not necessarily mean that the
company committed any wrongdoing or that charges will be filed.
Glencore and Glasenberg declined to comment for this article.

A billion years ago, a series of geological events began that would,
improbably, concentrate the majority of the planet’s cobalt on one
tiny slice of Earth. A stew of cobalt and copper began collecting in a
basin between the shifting plates of continental crust that formed
southern Africa. As those plates collided, they thrust the deposits
upward, forming a metal-rich belt 300 miles long and 150 miles across.
The process took hundreds of millions of years.
Cobalt almost always occurs in combination with other metals, and
along the part of the belt that fell inside modern-day Congo, it mixed
with copper. While even high-quality ore from other parts of the world
has copper and cobalt concentrations of less than 1 percent, some
portions of the Central African Copperbelt have 10 times that. Select
spots yield ore with 25 percent minable metal.

This rich earth became the key to power during the three-decade reign
of Mobutu Sese Seko, a totalitarian and kleptocrat in a leopard-skin
hat. Billions of dollars generated from copper production paid for
soldiers and outlandish extravagances, including an almost
two-mile-long runway (long enough to accommodate a Concorde) that was
carved out of the jungle near Mobutu’s home village. When a section of
the nation’s biggest mine collapsed in 1990, production halted and
Mobutu’s cash started running out. Unpaid soldiers mutinied, and
Kinshasa, the prim riverside capital, fell into chaos, leaving an
opening for rebel leader Laurent-Désiré Kabila to seize power in 1997.
His rise came with a pitch to foreign investors. “Come work with us,”
one of his lieutenants told the Wall Street Journal that April. “Those
who trust us today will have a jump-start.”

Gertler, a wildly ambitious man whose grandfather co-founded Israel’s
diamond exchange, heeded the call. Weeks after the regime change,
Gertler, then just 23, flew to Kinshasa. He bonded with Kabila’s son,
Joseph, who was his age and was running the Congolese army. Within a
few years, Gertler had paid $20 million to secure a monopoly on the
country’s diamond exports. When a bodyguard assassinated the elder
Kabila in 2001, Joseph became president—giving Gertler a direct line
to the palace just as global commodity prices were starting a
decade-long surge.

As Kabila was cementing power in a 2006 election, Gertler secured the
rights to Katanga, a giant copper and cobalt pit 40 miles west of
Mutanda. The big mining companies had scant idea at the time that the
land held uniquely rich deposits. The local subsistence miners,
however, had already started to burrow into the ground. Western
companies refer to these miners as “barefoot geologists,” because they
often lead foreign companies to extravagant riches. Men and boys
scavenged chunks of ore out of the earth and sold them to traders.
With flashlights strapped to their heads, they dug narrow tunnels into
the red earth, scraped the minerals away with hand tools, and lifted
110-pound woven sacks of ore to the surface. In the rainy season the
soil softened and the tunnels regularly collapsed, sometimes burying
men alive.

To describe Glasenberg as a trader is to evoke the wrong image—of
someone in front of a computer terminal, buying and selling abstract
numbers. Interviews with dozens of subordinates, partners, and rivals
paint the CEO as focused on the physical materials he trades and the
digging machines, ports, and people that shape their passage to
market. He’s known in the industry as a hard, relentless man. He can
be blunt. “So, what are you going to do with all your f---ing money?”
he once asked a man who’d agreed to be bought out by Glencore,
according to two people who were in the room at the time.

Although he oversees a global empire with 146,000 employees in 50
countries, Glasenberg was especially interested in Congo. Operating a
mine was a new challenge. So was Dan Gertler. Glasenberg personally
managed Glencore’s relationship with Gertler, according to six
executives involved in the transactions between the two men. The money
flowed from Glencore to Gertler’s companies for more than a decade in
the form of hundreds of millions of dollars of loans and contracts for
various services.

Glasenberg would pointedly acknowledge that Glencore’s ability to work
in Congo depended almost entirely on Gertler. Without him they could
lose their mines, Glasenberg said, admitting he had no other real
access to Kabila. The company didn’t even have a representative in
Kinshasa, depending instead on a Gertler employee to handle relations
with the government. Whenever an executive raised concerns about
relying too much on Gertler, two insiders say, Glencore’s head of
copper trading, Aristotelis Mistakidis, would brush them aside.

In the early years, Gertler’s closest relationship to Kabila’s inner
circle was with a presidential adviser named Augustin Katumba Mwanke.
In the style of a classic fixer, Katumba oversaw Congo’s mining
revival starting in 2006, although he had no official title. About
that time, Gertler took Katumba and his wife, Zozo, on a yacht trip on
the Red Sea and treated them to a performance of the spoon-bending
illusionist Uri Geller, according to Katumba’s self-published
autobiography. In the book, he also thanked Gertler for lobbying the
White House in support of Kabila and said Gertler had saved his life
by hiring 13 doctors to treat him when he slipped into a coma after an
operation during the trip to Israel. “From then on, his ideas also
became mine,” Katumba wrote. “Dan, my friend, my twin brother despite
everything that appears to make us different, I am proud to be the
brother you never had.” Katumba died in a plane crash in 2012.

In 2016 cobalt prices popped. Carmakers beat a path to Glencore’s
door, suddenly aware they had to get their heads around the new
battery technology

Glasenberg put Mistakidis in charge of Glencore’s Congolese mines, but
Gertler was often hard to handle. He squabbled over details in
contracts and was impatient about new investments, and when Mistakidis
didn’t give him the answers he wanted, he called Glasenberg.
Nonetheless, the relationship between Glencore and Gertler deepened.
The company rolled over loans to him at the last minute, never
requiring him to pay the principal. It gave him stock options at a
discounted price. In one instance, Glencore redrew Mutanda’s
boundaries to include some land that Gertler held, giving him a
sizable stake in the operation; five years later, the land hasn’t been
developed. Glencore even played a role in a complicated arrangement
whereby Gertler became the owner of a valuable stream of mining
royalty payments Glencore paid to Gecamines, a Congolese state-owned
company. Gecamines yielded the royalties to Gertler after defaulting
on a loan. Glencore then made a generous upfront royalty payment to
Gertler, financial documents, some from the Paradise Papers, show. Had
Glencore made the same early payment to Gecamines, it wouldn’t have
defaulted on the loan to Gertler and the royalties would still be
flowing, as intended, to Congolese coffers.

Glencore said in 2016 that Gecamines directed it to make the payments
to Gertler, and that it had taken “reasonable measures” to assure that
the sale was valid. Two years earlier, Glasenberg told the
London-based transparency group Global Witness that Gertler got
“absolutely zero preferential treatment” in their dealings. At the
same time, Benjamin Mancroft, a member of the U.K. House of Lords who
was then a spokesman for Gertler, told Global Witness that it was
“wholly misconceived” that Glencore offered his client preferential

By 2011 prices for many of the commodities Glencore sold were reaching
all-time highs. But the company needed cash to fund its expansion into
owning mines worldwide, rather than being the middleman to their
mineral wealth. That May, Glasenberg and the other senior Glencore
managers transformed their secretive Swiss partnership into a publicly
traded company, selling shares on the London Stock Exchange.
Glasenberg’s 16 percent stake was worth $9.3 billion. Five of his
colleagues also became billionaires, including Mistakidis.

It was a masterstroke of selling at the market’s peak: Today the
shares are 42 percent below their initial public offering price.
Glasenberg holds an 8.6 percent stake worth $4.8 billion. But the
listing in London may have had unintended consequences. It required
Glencore to give the public details about its business like never
before, helping attract attention, including, ultimately, from U.S.
prosecutors. At the same time, it created an opening for British
prosecutors to claim jurisdiction over what a Swiss company was doing
in Africa.

In 2016 cobalt prices popped. Carmakers beat a path to Glencore’s
door, suddenly aware they had to get their heads around the new
battery technology. That August, someone at the heart of the battery
supply chain asked Glencore for all the cobalt it could supply. He had
cash ready. Glencore’s traders had never seen anything like it. The
purple cobalt sludge coming out of Mutanda had become coveted. The
company expanded its processing capability to meet the demand.

Trouble appeared suddenly. In October of that year, Och-Ziff, the
largest listed hedge fund on Wall Street, reached a settlement with
U.S. prosecutors in which it admitted to conspiring to bribe Congolese
officials. The settlement said the fund had done so with the help of
an unidentified Israeli businessman who’d paid $100 million in bribes
to Congolese officials, including Kabila and Katumba. The liaison was
Gertler, according to a person with direct knowledge of the case.

The second shoe dropped in December 2017, when the U.S. Department of
the Treasury said Gertler had amassed a fortune in “opaque and corrupt
mining and oil deals.” He’d used his “close friendship” with Kabila,
Treasury said in a statement, “to act as a middleman for mining asset
sales in the DRC, requiring some multinational companies to go through
Gertler to do business with the Congolese state.” It said that between
2010 and 2012, the people of Congo lost more than $1.36 billion in
revenue to Gertler. The U.S. placed a raft of financial sanctions on
him, which meant Glencore couldn’t pay Gertler for their ongoing
business without risking penalties from the U.S. government. Glencore
scrambled to get out of arrangements it had with Gertler’s companies.
When it failed to make a royalty payment, Gertler and Gecamines
separately took Glencore to court in Congo, threatening to freeze and
dissolve the company’s operations in the country. Bailiffs rushed to
the mines to see what they could seize.

Without Gertler, Glasenberg no longer had any ties to power in the
country. Humiliating proof of that came this March, when he holed up
for 24 hours in a Kinshasa hotel hoping to lobby the president on a
new mining law. When he finally got the meeting, together with six
other international mining bosses, it didn’t go well. The Glencore CEO
emerged with a distant stare, letting the head of another company read
out a joint statement while he stood behind in silence. Kabila had
made no concessions.

The crisis cascaded. In June, in an attempt to resolve the legal
dispute with Gertler and keep its Congolese mines, Glencore agreed to
pay $29 million in royalties it owed Gertler for 2018. Glasenberg had
to choose between provoking the U.S. administration, which could
impose fines at a future date if it found a sanctions violation, or
Gertler, who could stop all revenue from Congo overnight. He chose the
former, a decision that shocked many familiar with the U.S. sanctions
regime, but the company said it had discussed this with U.S. and Swiss
authorities. The only concession Glencore made to the U.S. was to make
the payment in euros instead of dollars, which the company said it
believed made the payment compliant with the sanctions. By any
standard it was a novel solution, and sanctions experts remain divided
on how the U.S. government will react. Two weeks later, the Justice
Department issued its subpoena. Glencore’s board immediately set up a
three-person committee, including chairman Hayward, to oversee its
response. Hayward said the firm “takes ethics and compliance
seriously” and would cooperate with the Justice Department. (Peter
Grauer, the chairman of Bloomberg LP, which owns Bloomberg
Businessweek, retired from Glencore’s board in March, after five years
as a nonexecutive director.)

Investors are now sitting up. Glencore’s stock has fallen 20 percent
this year. Analysts at JPMorgan Chase & Co. and Goldman Sachs cut the
stock from their lists of recommended purchases in the second half of
2018, specifically citing the probes. The investigations were “news
hand grenades,” London-based analysts from Liberum Capital wrote in a
note to investors. “Uncertainty over the company’s past dealings will
persist. There is little they can do to assuage investors of their
innocence or that there are not any other future issues forthcoming.”

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Zambia's slide to authoritarianism @mailandguardian's @Fromagehomme

This means that the situation in Zambia is likely to get worse before
it gets better. The democratic backsliding taking place under the
Patriotic Front is rooted in the fact that Lungu is one of Africa’s
least secure political leaders. Constantly on the verge of losing
power, he has fallen back on intimidation and coercion in the absence
of major policy successes that he can sell to the Zambian people.
After two close and controversial election victories, which he won by
just 28 000 and 100 000 votes in an electorate of almost seven million
registered voters, any significant growth in support for the UPND
would spell defeat.
As the economic situation deteriorates, we will reach a point at which
only repression will keep Lungu in power — and that is very bad news
for Zambian democracy.

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South Africa All Share Bloomberg -12.45% 2018

Dollar versus Rand 6 Month Chart INO 14.0381


Egypt Pound versus The Dollar 3 Month Chart INO 17.9370


Nigeria All Share Bloomberg -16.17% 2018


Ghana Stock Exchange Composite Index Bloomberg +2.15% 2018


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Nairobi All Share Bloomberg -15.36% 2018
Kenyan Economy

Last week, @NSE_PLC recorded a mixed performance with NSE 20
-0.9%[-24.5% in 2018] NASI -1.4% [-15.4% in 2018] NSE 25 +0.4%
@CytonnInvest #cytonnreport http://bit.ly/2zihxvK

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COOP Bank share data here
Kenyan Economy

Market Cap: 82.727b EPS:1.99 PE:7.085

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.@Transcentury share price data
Kenyan Economy

Closing Price: 2.85 Market Cap: $7.72m EPS:-10.23

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by Aly Khan Satchu (www.rich.co.ke)
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November 2018

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